HONDURAS: AMENDMENTS TO THE STANDARDS FOR THE REPORTING AND PUBLICATION OF FINANCIAL STATEMENTS AND INDICATORS
In the dynamic financial world, user trust depends on transparency and timely information. The National Banking and Insurance Commission (CNBS) has published in Gazette 36,415 on December 21st, 2023, GEE Resolution No.806/05-12-2023, in which has made minor modifications to the rules related to the reporting and publication of financial statements and indicators in response to the constant evolution of the financial environment.
The National Banking and Insurance Regulatory Commission (CNBS) is responsible for establishing prudent supervisory standards to ensure the review, verification, control, and supervision of regulated institutions. The resolution aims to establish standards that ensure the transparency of the information that institutions in the financial system provide to the public.
These standards for the presentation and publication of financial statements and indicators set out clear guidelines to ensure that information is transparent to the public. This regulation applies to the following organizations: Commercial Banks, Honduran Bank for Production and Housing, National Bank for Agricultural Development, Savings and Loan Associations, Financial Corporations, Representative Offices and Credit Card Issuing Companies.
The main features of this new regulation, maintains the essence of previous regulations, and retains the responsibility of the Board of Directors for the inclusion of a certification ensuring that the issuance of the financial statements is the responsibility of the Senior Management of the Financial Institution.
Financial institutions will continue to be subject to regulations for publishing audited financial statements at the end of the accounting year, together with explanatory notes and the financial indicators required by the CNBS. This publication must be made four months before the end of the annual accounting year and the figures must be presented in national currency. The diversity in the means of publication varies according to the type of institution, focusing on its scope and its impact on society. There is a significant change for supervised institutions, with special laws indicating that in the case that the means of publication are not stipulated in their regulations, article # 9 paragraph 3 indicates: " they must publish once in two national newspapers."
Reports should be published every three months, including the March, June and September financial years. In the published regulations we can find the formats that must be followed for the publication of financial statements, providing clear guidance for financial institutions. These formats are detailed in Annexes 1, 2, 3, 4 and 5 of the standards, ensuring consistency in the presentation of information.
The same financial indicators are specified, but it is noted that the calculation of the required financial indicators must be published in a comparative manner with the previous year, the list includes the Non-Performing Loans Ratio, the Capital Adequacy Ratio, the Related Party Loans Index, the Liquidity Coverage Ratio and others listed in article #13.
The new regulations establish that the first annual publication will be made with the financial statements at the end of December 2023, and the first quarterly publication will be carried out at the end of the March quarter of 2024. Emphasis is placed on the ability of the National Banking and Insurance Regulatory Commission (CNBS) to require new publications in case of identifying data that alters or affects previously published financial statements.
GEE Resolution No.806/05-12-2023 revokes the previous resolution and any provision that opposes the new rules. Although minor changes are introduced, the regulations continue to reflect the commitment of the National Banking and Insurance Regulatory Commission (CNBS) to the transparency and quality of the financial information provided by supervised institutions. Financial institutions should strive to adapt to these new regulations in order to comply with regulatory obligations and contribute to a more transparent and trustworthy financial environment. The regulations express that the CNBS reserves the right to impose penalties for non-compliance, highlighting the importance of compliance with these rules by all relevant financial institutions.
The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
Ekber Matute
Senior Associate, Arias Honduras.
ekber.matute@ariaslaw.com